AUD/USD off session low, further recovery seems capped at 100-DMA

Having posted a session low at 0.7447, the AUD/USD pair has managed to bounce-back and is now trading in neutral territory around 0.7465-70 band. 

An unexpected decline in the number of employed people during August exerted some selling pressure during Asian session on Thursday. However, a surprise drop in unemployment rate limited further downslide and the pair remained confined within Wednesday's trading range. 

On Wednesday, a broad based USD weakness helped the pair to attempt a recovery back above 100-day SMA, which was sold into and the pair failed to build on to recovery gains to finally settle with only marginal gains. 

From technical perspective, failure to build on to tepid recovery gains and a sustained trade below 100-day SMA indicates that the pair's near-term depreciating move could get extended further in the near-term. Hence, trader will remain focused on today's US economic releases for fresh impetus ahead of next week's key Fed monetary policy decision, which would determine the pair's near-term trajectory.

Technical levels to watch

From current levels, a sustained strength above 100-day SMA, leading to a momentum above 0.7495 (Wednesday's high), is likely to trigger a short-covering rally immediately towards 0.7535 resistance, which could get extended towards 50-day SMA resistance near 0.7580-85 region.

On the flip side, a convincing break below 0.7450 seems to drag the pair immediately towards testing the very important 200-day SMA support near 0.7400 handle, which if broken would turn the pair vulnerable to continue drifting lower in the near-term.